ECB rate cut in June assumes no inflation setbacks, Finland’s Rehn says

By Thomson Reuters Apr 16, 2024 | 3:03 AM

HELSINKI (Reuters) – The prospects for an interest rate cut in June by the European Central Bank assumes that there will be no further setbacks in the geopolitical situation that affect energy prices and thus inflation, ECB policymaker Olli Rehn said on Tuesday.

The ECB opened the door to a June rate cut last week, and Finnish central banker Rehn emphasised that the prerequisite for such a decision is that inflation slows as expected.

“This assumes there will be no further setbacks, for instance in the geopolitical situation and therefore in energy prices,” he said in a statement, referring to the Middle East and Russia.

Some of Rehn’s colleagues were already making a case for a follow-up rate cut after June, but Rehn made no such comments.

“The ECB takes its interest rate decisions meeting after meeting in light of the latest information without tying their hands in advance to any specific interest rate,” he said.

(Reporting by Anne Kauranen in Helsinki, editing by Terje Solsvik)